Multi-Property BTL Owners face squeeze

Several news reports today have highlighted another strand of the government and Bank of England's clampdown on the buy-to-let sector.

It's a change that went largely unnoticed in a policy statement from the Prudential Regulation Authority in September, but will hit those with an existing portfolio of investment properties.

Under new rules coming into effect in September 2017, financial institutions offering loans on new buy-to-let property to anyone with four or more properties will have to assess all their portfolio, says the Financial Times.

In part, the move is because "mortgage arrears rates are higher when landlords own more properties", says the paper, which adds to risks in what is already seen as an overheated segment of the market.

Ray Boulger, the technical manager at mortgage broker John Charcol, said the change will mean fewer loans being offered to multi-property owners as the additional resources involved will make it unprofitable for the lender.

Wither few loans around, interest rates for landlords with larger portfolios could be increased by "a quarter or half percentage point".